This
past January, Newswithviews.com reported that the United States Supreme
Court was being asked to decide the issue of whether or not U.S. Tax Courts
should be able to keep vital information from taxpayers on the losing
side. (search)

On March
7, 2005, the high court, in a 7-2 decision sharply reprimanded the United
States Tax Court for concocting a "bold" scheme which allowed them to
withhold documents from individuals who had cases before the court and
also to any federal judges who would be reviewing the tax court's rulings
on appeal.

In the
two cases brought before the court, Ballard
v. Commissioner of Internal Revenue and Estate of Kanter v. Commissioner
of Internal Revenue, by what is called a Writ of Certiorari, the question
was:

In this
case, the trial was conducted by a “Special Trial Judge,” an employee-at-will
of the Tax Court who serves at the pleasure of its Chief Judge. The Special
Trial Judge was required to create a report of factual and legal findings,
but his Tax Court Rule 183 report has never been made available to the
parties, the public, or the reviewing Article III courts. Instead, his
superiors on the Tax Court either overruled his factual findings or persuaded
him to change his mind, thus creating a factual finding of tax fraud and
income tax deficiencies. This entire process took place off the record,
and came to light only in subsequent conversations between two Tax Court
Judges and counsel for another party. The questions presented are:

1. Whether
this secretive process is consistent with the Due Process Clause or the
right to effective Article III review?

2. Whether
this secretive process is consistent with 26 U.S.C. § 7482, which provides
that Article III courts must review Tax Court decisions just as they would
decisions of a U.S. district court.

Justice
Ginsberg said that neither federal or the tax court's own rules authorize
this type of concealment and stated, "Neither federal law nor the tax
court's rules authorize such "concealment," adding: "In comparison to
the nearly universal practice of transparency in forums in which one official
conducts the trial (and thus sees and hears the witnesses), and another
official subsequently renders the final decision, the tax court's practice
is anomalous."

Chief
Justice William H. Rehnquist and Justice Clarence Thomas both filed dissenting
opinions with Rehnquist stating, "The tax court's compliance with its
own rules is a matter on which we should defer to the interpretation of
that court."

The
high court's decision was hailed by the National Federation of Independent
Businesses giving this comment from Karen Harned of the group's legal
foundation: "Taxpayers fighting an unfair tax bill should have the tools
and information needed to mount a fair fight."

The
fact that the U.S. Supreme Court even heard these cases is rare because
it overturns rulings of two federal appeals courts, the Seventh Circuit
in Chicago and the 11th Circuit in Atlanta. Generally, federal appeals
courts address issues upheld in tax court.